Bitcoin has been rejected at $79,000 3 times in 8 trading days. This level is now defining the scope.
Bitcoin was trading at $76,923 on Tuesday morning, down 2.4% in 24 hours after climbing to $79,399 on Monday and reversing throughout the day. Ethereum fell 3.7% to $2,290, XRP fell 3.2% to $1.39, Solana fell 3.9% to $84.10, and BNB fell 1.8% to $625. Except for Tron and Dogecoin, all of the top 10 ended in red within 24 hours.
Brent crude rose 1% to over $109 a barrel, with gains extending into a seventh day after Iran’s proposal for an interim deal to reopen the Strait of Hormuz failed to make progress over the weekend. The White House said U.S. officials were discussing Iran’s latest offer but kept “red lines” on any deal to end eight weeks of war.
The MSCI Asia Pacific Index changed little. The Bank of Japan decided to maintain policy unchanged in a 6-3 split, supporting the Japanese stock market. The yen rose 0.3% against the dollar to around $159.
There are two interpretations of the Bitcoin market circulating among market analysts.
Mike Novogratz of Galaxy Digital said in a report that U.S. retail investors have returned to the market, and the combination of retail demand, institutional capital and limited supply have set the stage for further gains. Santiment data shows that whales have accumulated more than 40,000 BTC in the past two weeks, and the company said that sentiment has shifted sharply from fear to fear of missing out in a short period of time.
Analyst firm CryptoQuant takes the opposite view. Founder Ki Young-Ju said in an
Seven-day funding rates for perpetual futures on major exchanges remain negative at -0.13% per Coinglass, meaning shorts are still paying longs to hold their positions, a pattern that historically precedes squeezes and unwinds.
These two views are not mutually exclusive. Retail and institutional spot demand is likely to return while short covering drives prices towards $79,000. The test will be whether the next attempt at this level brings fresh spot buying, or whether it exhausts the shorts to squeeze.
Regardless, corporate accumulation continues. According to Bloomberg, Strategy purchased $3.9 billion in Bitcoin in April, which was the company’s largest monthly purchase in a year.
Japanese company Metaplanet on Tuesday announced a $50 million bond issuance to fund new Bitcoin purchases, the latest in a series of yen-denominated debt deals used by the company to build one of the largest corporate Bitcoin vaults outside the United States.
This week’s catalysts occur on Wednesday and Thursday.
The Federal Reserve announced its policy decision on Wednesday, with traders pricing in a higher likelihood of a rate cut after the Justice Department concluded its investigation into Fed Chairman Jerome Powell.
Big tech earnings from Alphabet, Microsoft, Amazon and Meta on Wednesday and Apple on Thursday accounted for about a quarter of the S&P 500’s market capitalization.
Either the Federal Reserve or a strong earnings report could provide the catalyst needed to push Bitcoin above $80,000. Without this, a third rejection at that level would begin to define the upper limit of the range, rather than precede a breakout.